G-20 linking IMF hike to bigger EU 'firewall' fund

February 27, 2012 • Business

U.S. Treasury Secretary Timothy Geithner delivers a speech during a conference at a so-called Group of 20 meeting in Mexico City, Sunday Feb. 26, 2012. (AP Photo/Marco Ugarte)

MEXICO CITY (AP) — The G-20 nations are conditioning additional money for the International Monetary Fund on the European Union first increasing its financial stabilization funds to ease concerns about the euro zone debt crisis, officials said Sunday.

Officials participating in a meeting of G-20 nations’ finance ministers and central bank heads said an EU decision to add to the estimated €500 billion ($675 billion) in firewall funds already committed to the effort would be essential before the rest of world considers contributing to the stabilization measures.

“Euro-area countries will reassess the strength of their support facilities in March. This will provide an essential input in our ongoing consideration to mobilize resources to the IMF,” the meeting’s closing joint statement said.

Christine Lagarde, head of the IMF, said the expectation that the EU’s firewall fund will be increased was widespread among G-20 officials.

“They all expect that the euro area will strengthen, consolidate, reinforce its firewall to make sure that it is both adequate and credible before they look at increasing the firepower of the fund (IMF).”

U.S. Treasury Secretary Timothy Geithner joined in the calls for the EU to do more.

“There is broad agreement that the IMF cannot substitute for the absence of a stronger European firewall and that the IMF cannot move forward without more clarity on Login to read more

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